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This article is by Charles R. Taylor, the John A. Murphy Professor of Marketing at the Villanova School of Business, Villanova University. He is a past president of the American Academy of Advertising and is editor in chief of the International Journal of Advertising.

While expert forecasts for political advertising expenditures vary considerably, there is now widespread agreement that all previous records will be broken. Indeed, predictions have continued to move upward, with Wells Fargo analyst Marci Ryvicker forecasting that $4.9 billion will be spent on political advertising in 2012. I personally would not be surprised if the $5 billion mark was met. To put this in perspective, approximately $2.7 billion was spent on political advertising in the 2007-2008 election cycle, a figure that eclipsed previous records.

The increase in expenditure provides a much-needed shot in the arm for the advertising industry. When the economy is in a slow growth mode with uncertain growth prospects, advertising expenditures often lag. As a result, forecasts of overall industry advertising industry growth for have recently been downgraded to just over 3% for 2011 and somewhere between 3.5% and 4% for 2012. The picture would be much worse if it were not for the 2012 Olympics in London and, more important, these rising political advertising expenditures.

The picture is even brighter for local television stations in many markets. Rino Scanzoni or Group M recently predicted 3.8% growth for the ad industry as a whole, but 8% to 9% growth for local television because of political ad spending growth. Of course, new media such as the Internet, social media, and SMS advertising also stand to make huge gains in this cycle as they become entrenched media for political advertising based on their highly effective use by Obama in the 2008 election and subsequent evidence of an ability to engage in effective targeting.

There is a degree to which political advertising expenditures in 2012 is a function of a “perfect storm” of sorts, in which virtually all conditions are conducive to higher spending. I would call five of these conditions the key to the growth of these expenditures in 2012.

1. There are a larger number of competitive races across the country than is the case in a typical campaign.

It is well publicized that with President Obama’s approval rating running at relatively low levels, there is clear potential for a highly competitive presidential contest. However, there are also many competitive gubernatorial contests around the country. And there's an unusual level of attention being given to several Senate contests, given the potential of a Republican takeover of the Senate--in part a possibility because Democrats will have to defend a larger number of seats in this cycle. Combining these factors with additional spending on competitive state and local races and it is clear that many local stations are going to sell out their inventory of space for a longer period of time than is characteristic of a typical election.

2. The Republican primary has already spurred record spending for a primary and is likely to see continued spending for several months.

While the Iowa caucuses appear to have returned Mitt Romney to frontrunner status, the current lack of consensus among Republicans as to whom the nominee should be bodes well for additional primary spending. In addition to Romney, Rick Perry, Newt Gingrich, a surging Rick Santorum, and Ron Paul, who has an apparently finite but very solid base of supporters, are all likely to continue making significant expenditures. Iowa has already seen record spending, and several other states including New Hampshire, Florida, and South Carolina are already reporting high levels of early buys. With Romney being a moderate Northeastern Republican and many early contests occurring in the South, it is unlikely that the contest will be decided quickly, even if things continue to go well for him.

3. The existence and legality of “Super PACS” opens up the door to mammoth spending levels by parties other than the candidates themselves.

Under current law, Political Action Committees are allowed to raise and spend an unlimited amount of dollars on political advertising as long as they do not coordinate their efforts with the candidates. Such spending is already going on in the Republican primary by groups such as “Winning Our Future” (Newt Gingrich supporters) and “Restore Our Future” (Romney backers). With a contentious general election on the horizon, expenditure by larger Super PACS will only increase, in part because of their ability to effectively execute negative advertising.

4. The fact that negative advertising can work in political campaigns leads to candidates' wanting to spend money on both positive and negative ads.

While I see too many articles on “Why Negative Ads Work” that make overly general statements about the effectiveness of negative political ads, the best research evidence suggests that negative ads can work under the right circumstances. One key factor is for a candidate to avoid overly personal attacks on another candidate or attacks that strike many members of the public as being unfair. In the current environment, Super PACS can effectively shield candidates from these caveats, as the candidate is not perceived by the viewer to be the source of the message. Meanwhile, more accepted forms of negative campaigning, such as attacking an opponent’s policies and/or record can be done by a candidate while simultaneously running positive ads about themselves.

5. The electoral map and the existence of several “battleground” states will mean extremely competitive spending in many places.

Charles R. Taylor

It has been well documented that political ad spending is actually driving some mergers of television stations as companies look to acquire stations in lucrative “battleground markets,” where high levels of advertising are expected. As everything points toward a competitive general election, the number of battleground states is likely to be higher than normal, including traditional battleground states such as Missouri and Pennsylvania, but also several that have not always fallen into this category, such as Wisconsin, Minnesota, North Carolina, Virginia, and Michigan, among others.

With these five factors looming and many energized contributors, 2012 will be not only a banner year, but also a fun one to watch for those interested in politics and political advertising.